The Great Health Care Face Off

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The die is cast. Democrats are either going to pass some version of their health care reform bill without Republican votes or they’re not going to pass health care reform at all.

No minds were changed by Thursday’s televised summit at Blair House, where the president and leaders of both political parties talked past one another for six hours and 22 minutes. No major or minor differences were resolved.

President Obama summed it up nicely near the end of the marathon session. He’d give the Republican leaders a few weeks to come up with minor tweaks in the bill that the Democratic leadership might accept. “If not, then we’ll move forward,” he said. Looking ahead to November, he shrugged his shoulders and added, “That’s what elections are for.”

Count me among the few observers who thought the summit made for riveting television. Any American who tuned in to even part of the session would have learned a lot about the nation’s health care and health insurance systems, and about the ways that it is likely to change if reform passes. They also would have learned that President Obama can add daytime talk show host to his list of many talents.

Health care is complex, the president said over and over. The bottom line is that individuals and employers will be required to buy insurance or pay penalties. Insurance companies will face stricter rules and will no longer be allowed to turn down people with pre-existing conditions. The bills provide nearly $1 trillion in subsidies over the next decade to small businesses and low- and moderate-income families so they can afford policies that now average over $13,000 a year.

To pay for this entitlement expansion, the legislation launches a range of cost-control reforms in the Medicare program (including repealing the extra payments for the popular Medicare Advantage program, which covers about 20 percent of senior enrollees). It also raises taxes on high-cost plans and high-income individuals and slaps surtaxes on drug and medical device manufacturers.

The Republican critique of those measures rarely rose above the level of political talking points, yet it held a germ of truth. The legislation consists of a half-trillion dollars in Medicare cuts and a half-trillion dollars in tax increases to pay for a major entitlement expansion. If you’re a deficit hawk, take out the third element of that equation. What’s not to like?

And that entitlement expansion, Sen. Ron Wyden, D-Ore., reminded viewers near the end of the session, got to the core of the differences that have kept the two parties divided during this overly long debate. “For six hours we (the Democrats) talked about broader coverage while Republicans talked about incremental coverage,” he said. “Yet all the experts tell us that incremental reforms cost more. Since the blowup of the Clinton plan in 1994, that’s been exactly what we’ve been doing — incremental reforms — and costs have been going up and up.”

Whether expanding coverage will create the conditions to finally put an end to that upward spiral remains the big unanswered question for the architects of this bill.

Sen. Charles Grassley, R-Iowa, made one of the more telling points and it was never refuted. He reminded the Democrats that more than half of the newly insured under the legislation would be turning to Medicaid for coverage. In his state, he said, Medicaid routinely underpays its providers and is having a hard time finding physicians to take currently eligible residents, much less a huge influx of new beneficiaries. “Isn’t it intellectually dishonest to make promises to 14 to 18 million people that you can’t deliver?” he asked.

But that’s a question for 2014 and beyond, when the coverage reforms actually go into effect.

Given the delays in implementation and profound doubts about the effectiveness of its cost control measures, it’s not surprising that the past year’s debate, described by Democratic partisans as comparable to the advent of Social Security or Medicare, has not generated the popular feeling of transformational change that greeted those epochal reforms.

Both those reforms were enacted in very different eras with much larger Democratic majorities, of course. But their architects also recognized they were creating systems that were meant to endure the test of time. Their boldness helped attract bipartisan support. Social Security passed in 1935 with 16 of 25 Republican Senators and 81 of 102 Republican members of Congress voting in favor. Medicare passed in 1965 with 13 of 32 Republican Senators and 70 of 140 Republican members of Congress voting yea.

The architects of this legislation are in no position to make such claims. Do we really expect Medicaid to serve as the long-term default program for large swaths of the working population whose employers don’t provide coverage and are too poor to afford policies in the exchanges set up under the bill? Will cost control measures that reduce costs by a mere one-tenth of one percent of gross domestic product over the next decade really do anything to solve the long-term structural deficits facing Medicare and Medicaid, much less ease the burden placed on private firms who pay the lion’s share of the working age population’s insurance tab?

This legislation, even if it passes, is hardly the last word on health care reform. There will be plenty of time for bipartisan fixes down the road.

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the <em>Chicago Tribune</em> and other publications. He is the author of the 2004 book, T<em>he $800 Million Pill: The Truth Behind the Cost of New Drugs</em>.